Around Los Osos Nov 3

Morro Bay tax receipts up
Opening of Hwy 1 boosts visits 10%

Morro Bay city manager John Craig reports that the January – March 2026 Sales Tax Update reports that the city’s 1% sales tax increased 9.9% over the same quarter of 2025, an increase greater than both the County and State experienced.

This increase is thought to be largely due to the reopening of Highway 1,favorable weather, and a healthy county pool allocation (sales tax allocated based on proportional cash receipts among county jurisdictions). Add in the opening of a new gas station and a new retail store

Morro Bay is at the south end of the famed Big Sur Highway 1 route popular with tourists visiting California. The Big Sur area was hit by a series of slides that closed the highway from 2023 to January 2026.

Translated to dollars, Fiscal Year 2025-26 sales tax as a whole outperformed prior year by 3% for a total of $7.2 million, compared to $7.0 in FY 2024-25.

Looking at another major general fund revenue – hotel bed tax or transient occupancy tax (TOT) for the year finished strong with total revenues for FY 2025-26 slightly up (+1.5%) over FY 2024-25.

The 24/25 fiscal year hotel occupancy was 60% while the latest year 25/26 climbed to 64%.

The latest Smith Travel Report shows in late September Morro Bay had a 68% occupancy rate compared to 75% in San Luis Obispo.

The city of San Luis Obispo, appears to have benefited from the opening of Highway 1 as well with January and February receipts up 8 and 9% over the same period the year before when Highway one was shuttered.